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Economy

Budget Box 2014-15: Highlights

Union Finance Minister Mr. Arun Jaitley presented Union Budget 2014-15. The highlights:

For individuals

  • No change in the Tax slab on personal income
  • Income tax exemption limit increased by Rs 50,000 to Rs 2.5 lakh and for senior citizens to Rs 3 lakh
  • Exemption limit for investment in financial instruments under 80C increased to Rs 1.5 lakh from Rs 1 lakh.
  • Investment limit in PPF increased to Rs 1.5 lakh from Rs 1 lak
  • Deduction limit on interest on loan for self-occupied house enhanced to Rs 2 lakh from Rs 1.5 lakh.
  • Reintroduction of Kisan Vikas Patra, National Savings Certificate with insurance cover to be launched
  • Long term capial gain tax for mutual funds doubled to 20%; lock-in period increased to 3 years
  • Mandatory wage ceiling of subscription to EPS (Employee Pension Scheme) enhanced from Rs 6,500 to Rs 15,000
  • Minimum pension raised to Rs 1,000 per month
  • LCD, LED TV become less expensive
  • Cigarettes, pan masala, tobacco, aerated drinks become costlier

 

New projects and programmes

  • 5 IIMs to be opened in HP, Punjab, Bihar, Odisha and Rajasthan
  • 5 IITs in Jammu, Chattisgarh, Goa, Andhra Pradesh and Kerala
  • 4 more AIIMS like institutions in Andhra Pradesh, West Bengal, Vidarbha in Maharashtra and Poorvanchal in Uttar Pradesh
  • Kisan TV for farmers, Arun Prabha TV for northeast
  • National Rural Internet and Technology Mission for services in villages and schools, training in IT skills proposed
  • ‘Digital India programme will be launched to ensure broad band connectivity at village level
  • Ultra Modern Super Critical Coal Based Thermal Power Technology has been proposed
  • ‘Jal Marg Vikas’ a project on the river Ganga for inland waterways between Allahabad and Haldia; Rs 4,200 crore will be allocated for the same.
  • “Uniform Account Number” service will be launched by EPFO for contributing members.
  • Project “Neeranchal” will be launched to give fillip to watershed development in the country with an initial outlay of Rs. 2142 crores.
  • Beti Bachao, Beti Padhao Yojana to spread awareness and help in improving the efficiency of delivery of welfare services meant for women.
  • Achieving “Health For All” objective through Free Drug Service and Free Diagnosis Service
  • Two National Institutes of Ageing to be established at AIIMS, New Delhi and Madras Medical College, Chennai.

 

Key allocations

  • Rs 100 crore allocated to support about 600 new and existing Community Radio Stations
  • Swachh Bharat Abhiyan to cover every household with sanitation facility by the year 2019
  • Rs 100 crore for metro projects in Lucknow and Ahmedabad
  • ‘Namami Gange’ the Integrated Ganga Conservation Mission has been allocated Rs 2,037 crore
  • Rs 150 crore set aside for enhancing safety of women in large cities
  • Rs. 7,060 crore allocated for the project of developing 100 Smart Cities.
  • Rs 11,200 crore for PSU banks capitalization
  • Rs 500 crore allocated for rehabilitation of displaced Kashmiri migrants
  • “Pradhan Mantri Krishi Sinchayee Yojna” has been provided Rs 1000 crore.
  • Rs. 50,548 crore under the SC Plan and Rs. 32,387 crore under TSP

 

Economic Measures

  • Composite cap of foreign investment to be increased to 49% in Defence and Insurance sectors.
  • Requirement of the construction area and capital conditions for FDI decreased to 20,000 square metres and $5 million respectively for development of smart cities.
  • Manufacturing can sell its products through retail including e-commerce platforms.
  • Requirement to inject Rs.2,40,000 crore as equity by 2018 in our banks to be in consonance with Basel-III norms PSUs will invest through capital investment a total sum of Rs. 2,47,941 crores.
  • Rs 4,000 cr allocated to increase flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.
  • Government supports consolidation of PSU banks
  • Providing greater autonomy to PSU banks while making them accountable is under consideration

 

Some key fiscal information

  • Government expects Rs 9.77 lakh crore revenue crore from taxes
  • Plan expenditure pegged at Rs 5.75 lakh crore and non-plan at Rs 12.19 lakh crore.
  • Fiscal deficit target maintained at 4.1% of GDP for current fiscal and 3.6% for FY 2016
  • Disinvestment target fixed at Rs 58,425 crore
  • Gross borrowings pegged at Rs 6 lakh crore
  • Configuration of GST to be finalized this fiscal
  • Government to examine DTC proposal.

 

Administrative reforms

  • Panel to examine all fresh tax demands for indirect transfer of assets in wake of retrospective tax amendments of 2012
  • Setting up of Expenditure Management Commission; will look into food and fertilizer subsides
  • Legislative and administrative amendments to clear up pending tax demands of more than Rs. 4 lakh crore under dispute and litigation.
  • Formulation of New Urea Policy
  • MGNREGA would provide more productive, asset creating wage employment with linkages to agriculture and allied activities
  • A panel will look into and recommend how unclaimed amounts with PPF, Post Office, saving schemes etc. can be utilized to protect and further financial interests of the senior citizens
  • Slum development to be included in the list of Corporate Social Responsibility
  • Panel to look into the financial architecture for MSME Sector, remove impediments and create new norms and structures regarding the same.
  • To provide support to mainstreaming PPPPs (People Public Private Partnership) called4PIndia”, an institution will be established with a corpus of Rs. 500 crores.

New Rail Budget’s 8 common man-friendly steps

The maiden Rail Budget of Prime Minister Narendra Modi-led NDA government proposes to initiate a number of passenger-friendly measures, aimed at facilitating the commuters in the long-run and improving the overall experience of travellers.
The budget has mentioned 8 main common man-friendly measures. Let’s have a look:

High Speed rail network and Bullet trains:

  • Bullet trains will be introduced in the Mumbai-Ahmedabad sector.
  • Diamond Quadrilateral network of high speed rail linking major metros and growth centres is being worked out.
  • Increasing train speeds between several cities to 160-200 km/hour. Railways will spend Rs 100 crore for high speed trains between metros. The government needs Rs 9 lakh crore for funding  Diamond Quadrilateral.

Revamp of Ticket reservation system: 

  • Next generation e-Ticketing system, capable of supporting 7200 tickets per minute as against 2000 tickets per minute and allow 1,20,000 simultaneous users at any point in time, will help in the revamp of railway reservation System.
  • Ticket booking through mobile phones and through post Offices will be promoted. Steps will be taken to provide facility of purchasing platform tickets and unreserved tickets Online.
  • Parking-cum-Platform Combo Tickets to facilitate the passengers and to save their time.
  • Online booking facility of railway retiring room will be extended to all the stations during the course of the year.

Improve catering and food: 

  • Introduce pre-cooked (Ready-to-eat) meals of reputed brands in a phased manner with a view to improve the quality, hygiene of on-board catering services and to provide variety.
  • Quality Assurance Mechanism through Third Party Audit by NABCB certified agencies to ensure the quality and standard of catering services.
  • A system of receiving feedback through IVRS mechanism, from the travelling passengers on the quality of food served. If the service does not meet the set standards, especially in hygiene and the taste, stern action would be taken against the vendors including cancellation of the contract.
  • Food courts at major stations to offer the option of ordering regional food while onboard, through emails, SMS and smartphones, etc. The railways will soon to launch a pilot project between New Delhi-Amritsar and New Delhi-Jammu Tawi sections.

Global Standard Stations:

  • Railway Ministry will develop 10 major stations in the country to global standards. It will provide Wi-Fi in A-1 and A category stations and in select trains.
  • Large scale integrated computerization of Indian railway systems will be done. Stations will have digital reservation charts.
  • Cleaning activities will be outsourced at 50 major stations. The allocated budget for cleaniness has been raised by 40%. The number of Bio-toilets will be increased on trains.  

58 new trains, 11 existing trains extended: 

  • Five Jansadharan Trains, 5 Premium Trains, 6 AC express trains, 27 express trains, 8 passenger trains, 2 MEMU services and 5 DEMU will be introduced this year.
  • Special trains to meet the holiday and festival rush would continue to operate.

Improving Safety: 

  • Indian Railways need around Rs 40,000 crore  improving rail safety. Rs 1785 crore will be provided for road under bridges and over bridges.
  • Ultra sonic devices to detect rail fractures and automatic closing of doors both in mainline & suburban coaches are being considered.
  • 17,000 RPF constables will be available for trains.
  • Ladies coaches will be escorted by women RPF. Special instructions are being issued in each class of travel for the safety of ladies travelling alone.
  • Boundary walls will be constructed around stations through the PPP way.

Workstations on Wheels:

  • With a view to provide better facilities to business travelers, Indian Railways will provide workstations in select trains on payment basis.
  • To start with, railways will provide Mobile based Wakeup Call System for passengers, Mobile based Destination Arrival Alert, Station Navigation Information System, Extension of Computerized Parcel Management System.

Trains dedicated to Tourism:

  • Promoting Eco-tourism and education tourism in North Eastern States.
  • Special Pilgrim Circuits like Devi Circuit, Jyotirling Circuit, Jain Circuit, Christian Circuit, Muslim/Sufi Circuit, Sikh Circuit, Buddhist Circuit, Famous Temple Circuit have been identified
  • . For these circuits specially packaged trains will be introduced.  Private participation in this sector will also be encouraged.

 

Government ambiguous on Direct Tax Code, says Bill has lapsed

As per the Government, the Direct Taxes Code, which proposed revamp of the six-decade old Income Tax Act, has lapsed. No commitment has been given on reviving the same.

The Minister of State for Finance Nirmala Sitharaman gave a written reply to a question in Rajya Sabha which said that with the dissolution of the 15th Lok Sabha, the Direct Taxes Code Bill, 2010 has lapsed.  The DTC, which proposed replacing the old Income Tax Act of 1961, was introduced in the Lok Sabha on August 30, 2010.

Rules of import of rough and polished diamonds eased: RBI

The Reserve Bank of India (RBI) gave relief to diamantaires in Mumbai and Surat as it relaxed the rules of ‘suppliers’ and buyers’ credit for importing rough, cut and polished diamonds to up to 180 days from 90 days with immediate effect.  In 2011, the RBI had decreased the import payment credit limit for the Indian diamantaires from 120 days to 90 days. If the 90-day period got lapsed, then the diamantaires were required to get permission from the RBI to make the payment which further delayed the process. Also, currency variations during this period were causing additional burden along with the interest cost for the diamond traders.

According to RBI notification, the “Clean Credit” i.e credit given by a foreign supplier to its Indian customer/buyer, without any letter of credit/letter of undertaking/fixed deposits from any Indian financial institution for import of rough, cut and polished diamond, may be permitted for a period not exceeding 180 days from the date of shipment. 

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